Small business orientation 2012 v1

Texas State SBDC 2011

Getting Started in Business

The Business Plan


The Business Advisor

Small Business

Development Centers

Introductions …


Managing Expectations

1) From Idea to Launch … What Happens? 50% Don’t Make it to Step-2 (Business Plan), 75% Never Launch

* It is Hard Work & Long Hours * I Have to Promote & Sell Myself

* I Have to Use My Own Money * I’m Not Really That Committed

2) Failure Rates …. Why? 50% of Starts Fail in First 2 Years, 75% of Starts Fail in First 5 Years

* Start For the Wrong Reasons * Location, Location, Location

* Poor Management * Poor Planning

* Insufficient Capital * Overexpansion (Focus/Discipline)

* Website & Technology * Sales, Marketing, Pricing

3) What Can You Do Differently? * Research/Plan * Resources/Help

* Over-Funding * Networking/Technology

* Do It Yourself * Sell, Sell, Sell


Dispelling Myths & Misconceptions

• The SBA “Money Tree” & Grants Will Get Me There• If I Build It, They Will Come !!!• I Believe … Therefore everyone else will• Raising money is the end in itself; $ validates you• Someone is going to steal my idea…

– Confidentiality Agreements & Intellectual Property• No Platitudes …

• It’s flawless, can’t fail• I must maintain control

• There is no competition• Best customer service


Startup Money

Sources of Start-up Capital… – Owner Equity – Family & Friends– Funding Websites

----------------------------------------------------------------– Bank Loans– Formal Investors– Grants & Competitions– SBIR/STTR/Etc.

Business Cycle Bank Loan Decisions &Outside Funding Paths

Business Cycle Bank Loan Decisions &Outside Funding Paths

85%85%

A Business Plan ???




Do You Need it in Writing?

• Do you have a clear vision?• Do you have years of experience, network, and

reputation in your industry?• Can you clearly describe your customer profile, market

niche, marketing approach, sales strategy? • Do you have the capital, credit score, partners and

resources?

Three Stories – No, Yes, Partial


The Business Plan

• Narrative Component & Financial Component– Starting with Assumptions– DIY: Don’t Use Canned Software or Paid Writer

• What Characterizes a Good Business Plan• What’s New in Business Plans• What is Your Audience Looking For?

– Ten Traits in Ten Minutes

• Additional Suggestions• Do’s & Don’t’s• Keep Your Eye on the Prize


Narrative Components of a Business Plan

• Introduction, Executive/Financial Summary• The Idea: Your Products and Services• Customer Profile, Need, Target Market• Product, Technology, Operations• Marketing Plan & Budget• Sales Strategy & Tactics• Team


Financial Components of a Business Plan

• Budgets (Launch / Operations)• Sources & Uses of Funds • Business Financial Projections• Personal Financials & Tax Returns• Credit Score / Report• Supporting Documentation

Show Milestones


What Characterizes a Good Plan?

• 3 Legged Fit. Market, Personal, Financial• Targeted, direct, purposeful. Specific/Focused• Supported by verifiable research and insightful

analysis. Bottom-up, First.• Recognizes risks, threats, and the competitive

environment. Realistic.• Embodies real-world opportunities and planned

contingencies. Thoughtful & Agile.• Reflects you & your Business. Unique.• Clear, Concise, and Compelling. Respect.


What’s New in Business Plans!by Rhonda Abrams (Business Plan Author)

• Consider Globalization / Outsourcing• Greater Emphasis on Feasibility Analysis• Plan for the Use/Role of Technology and

Social Media in Your Business • Address Social Responsibility• Have a Plan for Distributing your Plan• Peter Gruber (Yahoo Finance) …

– “If you can’t tell it, you can’t sell it” (VIDEO)


Ten Traits in Ten Minutes (by David Rose, Venture Capitalist)

Experience Leadership

Knowledge Commitment

Skills Vision

Passion

Integrity

Realism Traction

Humility/Coachability


Additional Suggestions

• Know Your Plan (Walk the Talk)• Get Help & Solicit Genuine Feedback • Make Sure it all Connects, Be Consistent• Be Passionate, Don’t Follow Your Passions • Communicate @ 8th-Grade Level• Professionalism Counts• People Connect to People• Remember: It’s All About Money


Do’s and Don’ts

• Do: Progress logically & use lots of visuals

• Do: Connect to things your audience understands

• Do: Cite independent sources for validation

• Do: Make sure the opportunity is believable

• Do: Edit, Edit, Edit – Devil’s Advocate

• Don’t: Include typos, errors, omissions

• Don’t: Present internal inconsistencies or contradictions

• Don’t: Discuss things the audience won’t understand

• Don’t: Say anything untrue, unbelievable, or irrelevant

• Don’t: Guess at numbers or use random assumptions


Keep Your Eye on the Prize

• I Don’t Know You ?• I Don’t Know This Business?• Why Should I Even Care ?

• How Can I Help ?• What are the Next Steps ?• Where Do I Send the Check ?


When it all Seems Overwhelming, Remember .. Persistence Pays


Next Steps

• Get Help & Solicit Genuine Feedback • Do Your Homework. Know Your Business• Analyze Feasibility & Prove Concept

• Write, Re-Write, Write, Re-Write !!!